I used to be confident of many things when I was a younger lawyer: trust companies cost too much and give bad service, I would live a conflict-free life and not have to worry about Alzheimer's disease and my family would never have any soap-opera type of drama. Now that I've lived a while, I realize the error of my ways. I see trust companies providing much better service than they used to while providing better overall returns for beneficiaries than family members. I see that if I make it past 80 years old without a massive stroke, some type of dementia is a real possibility. I've also seen some drama in my family that I would have expected on "Melrose Place." And now I'm not surprised to see drama in the families I counsel now either.
People like to say that money is the root of all evil. I'm familiar with hearing that in the church--it comes from people who take pride in "depending on God for all my needs," which often is said with an open palm extended, because they don't mind other people having that evil money. After all, who else will God direct to them to supply their needs with that evil money? But I digress. The correct phrase, from the book of Timothy in the Bible, is "the love of money is the root of all evil." Money isn't the bad thing, especially because it's necessary to survive. However, we all know that what we have doesn't usually feel like enough, so then what do we do to get more money? Unfortunately, many people faced with that question choose "evil" shortcuts.
In my area of practice, trusts and estates, the shortcuts usually take the form of finding people with money and taking it from them somehow. People anoint themselves as Robin Hood and also anoint themselves as the "poor" who get the money. Finding these schemes and unraveling them is a good part of what makes my job rewarding (and fun). Preventing these schemes is also a great part of my job.
The first step in prevention is knowing that if you have assets, people will want to take them. You may think you're not related to anybody who would even think such a thing, or would never allow people in your life who could do such a thing. You may be right, but if you're wrong and haven't protected yourself, getting your money back is expensive, if still possible.
So, who would do such a thing? The cut-rate, unbonded caretaker who thinks he/she deserves more. The helpful neighbor who slowly gets access to all areas of your life and slowly cuts off your access to other people. The son on disability who may or may not be recovered from his drug problem and has a girlfriend who'd really like a new car. The not-so-bright daughter who gets her investment advice (for your money) from dubious sources on the internet. The son-in-law who needs funding for his future real estate empire. The former student whose business ventures are forever just around the corner from sure success. The caretaker "mother/nephew" team who turn out to be lovers and writing their paychecks for $10,000 per month each. The "mother/daughter" wanting to be added on title to your property, who also turn out to be unrelated and lovers--incredibly, this one, like all the previous examples, is true, and happened to one of the nicest, most down-to-earth guys I know. Not all these Robin Hoods were professional scammers, but you can bet their skills get better with each victim. And the victims cover the economic, intellectual, racial and psychological spectrum--everyone is a potential target. These Robin Hoods look for people who are at a vulnerable place in their lives, and we all have the potential to be in that situation.
Once recent case concerns a possible heir who was born to a married couple but was most likely not fathered by the husband. That in itself is not uncommon, but then it's complicated even more in that it looks like the "heir" trying to claim the estate is not really her at all, but one (or perhaps several) imposters! It appears three different people claiming to be her have shown up at three different court hearings. She may be disqualified in more ways than one.
Thus, if you're fortunate or foresighted enough to have accumulated some wealth in this lifetime, someone (who may appear completely genuine and loving) wants to take it. How do you protect it? First, know that you can take of people without making them owners of your stuff. They can be in your will, or beneficiaries of insurance polices/retirement plans/bank accounts, or trust beneficiaries--these are good options because they're all revocable. You can change them later if you want to, and you maintain control while you're alive. You should consider naming professionals as your successor Trustees. They'll charge the same fees as your friend/relative/CPA would, but they're licensed, insured, bonded and have become very good at what they do. And if they're not doing a good job, the trust can provide mechanisms to remove them easily and replace them with professionals who will. If you don't name professionals, at least consider who the "watchdog" of your trustee(s) will be.
Also, your advisors (financial advisor, accountant, insurance, and even your pastor) should know you well enough to try and get help when they suspect something's not right. We're all used to managing our assets ourselves, but my work has taught me that there will come a day, if I live long enough, that I am no longer able to do so. I've planned for that day, and you should plan for that day too.
As for protecting your beneficiaries, you can leave money to your children in trust--they can receive a nice chunk of income, and distributions for specific purposes, but the principal assets will be locked safely in a trust from their creditors and predators. This doesn't even have to deprive them--they can live in a house owned by the trust, drive a car owned by the trust, and live off income from the trust. They can even have a hand in investing the trust assets.
I hope you'll never need the safety measures, but please see an attorney about making sure they're in place. And if your new girlfriend's daughter looks a bit older than you'd expect, and is just a little too close to Mom, you have a right to be suspicious.
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